If it weren't for state government, May and June would be awfully slow at Uintah Business Systems Inc.
In June this year, the state Department of Corrections rescued the South Salt Lake computer vendor from the usual early summer sales slump by plunking down about $3 million for a computer system.According to the state's Legislative Fiscal Analyst, it is no coincidence that June is usually a big month for Uintah.
A study commissioned by the Legislature's Interim Appropriations Subcommittee said state budgeting practices force state department's to go on eleventh-hour spending sprees in May and June (the last two months of the fiscal year) for fear of having next year's budget cut.
Hurried purchases may not be the most prudent way to acquire equipment, the report suggests, but the manager's credibility is on the line if he doesn't spend what he projected he would.
"These factors, and others, tend to put executive branch managers in the position of `spend to the limit of the budget' or be penalized" and not receive the necessary funding for the next year, the report said.
A fiscal analyst's examination of spending during the past two months (May and June) of the fiscal year paints a picture of panic spending of up to half the budget in some areas of state government.
From 1990 through 1992, an average 62 percent of the money set aside for bonuses is paid out in May and June. Fifty-one percent of the computers and data processing budgets and 49 percent percent of a department's budget for office furniture are spent during that same period.
And if you wondered why state employees are scarce in early summer, they are probably at a convention or seminar. On average, state departments spend 43 percent of the training and development budgets in May and June.
State money that is lost if it is not spent by year-end is called lapsing funds. Money that can be carried over into the next year's budget is called non-lapsing funds.
State managers aren't necessarily irresponsible in their budgeting and spending, the report said. Most managers set aside reserves for unexpected emergencies and hold off on optional spending until the second half of the year, when revenue projections are more realistic.
But the arrangement might result in unwise purchases made in the final weeks of the year, rather than throughout the year, the report said.
That is not the case in computer purchases, contends Todd Douglas, Uintah Business Systems sales manager. He told the Deseret News that corrections officials had worked with his sales force for six months before making the purchase, and they are still in contact setting up the system and buying more components.
Ray Peddersen of Com-puter-Land, another state vendor, agrees. "Most state projects take an enormous amount of planning, and we work with them for months. I have no perception of state managers spending in May and June on a basis of use-it-or-lose-it," he said.
Nevertheless, a survey of state managers found that if more money were designated as non-lapsing, taxpayers' revenue would be better spent. The report cited a California municipality that did away with lapsing funds and after a 10-year period realized $6.1 million in savings.
The appropriations committee on Wednesday agreed to have the fiscal analyst draft proposed legislation that would eliminate lapsing funds, while giving state managers financial incentives for producing non-lapsing money. The bill would give lawmakers control, however, over how the non-lapsing money is spent in the next fiscal year.